Why Are Fewer Patients Enrolling in Hospice?

Suddenly, many hospices are admitting fewer patients. Others are increasingly caring for people for just days or hours before they die. The result: cash-strapped hospices are cutting back on nurses and aides, and patients are missing out on critical end-of-life care.

It is not clear why it’s happening, but some hospice officials blame both a bad economy and Medicare rules that unintentionally discourage doctors from referring all but those who are about to die.

Even though hospices have been operating in the U.S. for three decades, they remain widely misunderstood. Hospices provide medical care, pain management, spiritual and social care and volunteer support for those nearing the end of their lives. And their patients often live longer than if they were still receiving full-blown medical treatment.

Nearly all hospice care is paid by Medicare, but unlike most providers, hospices are paid a fixed daily rate (on average about $140-a-day for home care patients). If a hospice provides care for less, it keeps the difference. If a patient requires very costly care, the hospice can lose money. The number of patients served by hospices increased from about 1 million in 2004 to nearly 1.5 million in 2008, while the number of hospices grew from 3,600 to almost 5,000. Most of this explosive growth has been driven by for-profit companies.

But in recent months, hospice officials have seen a downturn. In some states, such as Oklahoma, heavy competition has forced consolidation, and at least 10 hospices have closed in the past year.

Elsewhere, hospice officials blame the bad economy. Patients who have lost jobs–and insurance-may be waiting longer to visit the doctor and consequently are diagnosed with terminal illnesses at a very late stage.

Some hospice executives say the poor economy may also be driving doctors to hold on to patients longer. Here’s why: Once a patient joins hospice, she’s likely to see her physician far less often. Her doctor can usually order tests and treatments only to keep her comfortable, and not to try to cure her terminal disease. And while it may still be appropriate for, say, cancer patients to receive costly drugs or even radiation therapy to relieve pain, hospices must pay for these treatments out of their daily Medicare rate. That inevitably can create tension between the hospice and the physician.

And it may add up to less money for doctors at a time when they are already feeling squeezed. One physician I spoke to strongly rejected this argument, insisting that declining compensation does not slow referrals. But another-an oncologist who frequently refers to hospice-acknowledged the problem. “There is a financial deterrent,” she says.

At the same time, new Medicare rules may be further discouraging physician referrals. Medicare has begun cracking down on a handful of hospices that are making big profits by taking on chronically ill, but not terminally ill, patients. While hospice patients are normally expected to have six months or less to live, some hospices have many on their rolls for a year or more. In one attempt to stop this practice, Medicare now requires doctors to write a brief narrative describing why a patient is appropriate for hospice. Trouble is, says one hospice official, “We’re getting a lot of pushback” from doctors.

In 2008, more than one-third of patients were enrolled in hospice for a week or less, and some organizations are seeing the number of short stays increase, perhaps because these requirements may be making already reluctant doctors even less willing to refer to hospice until their patients are actively dying.

Mark Murray, president of the Center for Hospice and Palliative Care in South Bend, Ind., says that in the past year, eight percent of his referrals died before they could even be admitted, and 20 percent died within 48 hours. Those last-minute decisions put enormous financial pressure on hospices and make it impossible for patients to get the full benefit of end-of-life care.

These disincentives come on top of a long-standing reluctance on the part of many doctors to even talk about hospice. In a 2009 study, more than half of patients with stage IV lung cancer said their physicians never even raised the option.

I am a huge fan of hospice: My wife is a hospice chaplain and both my father and father-in-law were hospice patients. These organizations are a model for coordinated care that other health care providers would do well to copy. But doctors need to be persuaded to use hospice. And that may mean changing a payment system that may be discouraging them from using this valuable service.

Howard Gleckman, a resident fellow at the Urban Institute, is author of “Caring For Our Parents” and a frequent writer and speaker on long-term care issues.